Climate Fund’s investments in more detail

The Climate Fund’s operational guidelines permit the Fund to offer equity financing, debt financing and mezzanine funding. The Climate Fund focuses on capital loans as its primary funding instrument. 

Funding instrumentation of the Climate Fund:

  • Capital loans are the primary funding instrument of the Climate Fund. In addition, investing in funds and expansion into debt instruments can be considered in certain cases. 
  • The company also reserves the right to use other instruments permitted by its operational guidelines when necessary. 

The Climate Fund does not award grants or subsidies. 

The Climate Fund’s ticket size is typically between 4–40 million euros. The lower end of the range is considered to be more suitable for digital investment targets, whereas the upper range is more suitable for facility investments. The Climate Fund can also participate with larger ticket sizes. However, when the company’s investment exceeds 20 million euros, the investment decision must also be supported by the Ministerial Committee on Economic Policy. 

The Climate Fund operates in a minority role in the investment category of commercial scaling (i.e. the company’s contribution is maximum 50 % of total funding). As a rule, the Climate Fund also requires projects to have a significant amount (at least 30 % or so) of other market-based funding. 

Investment targets may include private and public companies, as well as those jointly owned by public and private partners (so called public private partnerships). 

The funding by the Climate Fund must provide verifiable added value for the investment targets, for example by enabling the realisation of the project and its impact in the first place, on a larger scale or earlier than it would with funding from elsewhere. 

As the company does not offer funding instruments considered as EU State Aid, every funding decision needs to fulfil the criteria of being market-based. In the long term, the Climate Fund’s investment targets and funding must be self-sustainable when assessed as a whole, and there must be a credible plan for the repayment of the funding. 

Investing in funds is not a focus area for the Climate Fund, and the Fund does not participate in funds that include Tesi or Business Finland VC as investors. The Climate Fund will consider participation in funds, for example if a new form of fund consistent with the Climate Fund’s goals is being brought to market and its impact would be realised on a significantly larger scale or earlier than it would without the participation of the Climate Fund, or which would not be implemented at all without the Fund’s participation. Such funds and instruments could include special investment funds or finance companies set up to solve a specific challenge related to the climate or environment, whose primary goal is to achieve significant emissions reductions and/or other environmental impact. 

If you are unable to find the information you are looking for from our website, please contact our Customer and dealflow team via email.

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